Opinion: Congress Needs to Look Hard at Military Pay

Popular support of the U.S. military over the last few decades has helped lead to an increase in personnel-related costs across the force. If left unchecked, these increasing costs will overwhelm the Defense Department budget. Yet, there is no political will in Congress to implement change.

Today’s military compensation includes pay and allowances; in-kind benefits like health care, education, shopping privileges, and housing; and deferred benefits such as retired pay, retired health care, and veterans benefits.

Over time, compensation will consume a rising portion of the defense budget, leaving little money to develop and field future systems, build facilities, or operate forces. In fact, the recent Center for Strategic and Budgetary Assessments’ study, “Rebalancing Military Compensation: An Evidence-Based Approach,” states that if personnel costs continue growing at the present rate, they will consume the entire defense budget by 2039.

In recent years, popularity of the military has remained higher than any other time since the all-volunteer force was created in 1973.

Assuming that popularity and confidence are complementary, a recent Gallup Poll, “Confidence in Institutions,” ranked “the military” above all, including “small business,” “the police” and “the church or organized religion.”

Such confidence has been high since the terrorist attacks in September 2001.

Reflecting the sentiment of the population, military personnel also enjoy widespread support from Congress. At the start of the all-volunteer force, there was a small gap between military and civilian pay, which increased to about 13 percent by 1996.

Over the following years, Congress closed the pay gap sufficient to maintain the force. However, it continued to increase military pay and compensation to a point, some research shows, that military pay is well above civilians of equal education.

In fact, Congress has increased pay at or above the amount required by statute or the amount proposed in the President’s Budget every year since 2000.

Fewer than 60 bills were signed into law during the first year of the 113th Congress. At this pace, this will become the least productive Congress in the last four decades.

Yet in that environment, Congress demonstrated unified support related to military pay. As a government shutdown due to the absence of an appropriation bill loomed, Congress passed the “Pay Our Military Act.”

At a time when most federal employees were furloughed, this act provided pay and allowances to the armed forces. The act passed without opposition and was said to be a rare moment of bipartisanship in this highly divided and unproductive Congress.

Some would say the fact that Congress passed a budget in December 2013 that reduced military retiree cost-of-living adjustments was a sign that it might be willing to reform military compensation.

That may not be the case. In late December, lawmakers from both parties introduced bills to restore the cost-of-living increases.

Many military compensation reforms have been proposed. As early as the Gates Commission report in 1970, numerous entities have recommended changes to the system. Few reforms have been incorporated other than changes to adjust the gap between civilian and military pay, and inequalities within the military pay scale.

Had the reforms suggested over the last four decades been incorporated, the country might have a compensation package more appropriate for an all-volunteer force.

Recently, Secretary of the Navy Ray Mabus testified that a slowdown in base pay growth would not likely cause recruiting or retention problems in the near term and that there was room to slow down base pay growth.

Similarly, the service chiefs each testified before the Senate Armed Services Committee in November, stating that the increasing personnel-related costs will displace the rest of their budgets at some point in the near future.

And if we keep going this way, it’ll be at 60, and then it’ll be at 70 in about a decade plus.”

Gen. James F. Amos, the commandant of the Marine Corps, said that he pays 62 cents of every dollar for manpower.

“That’s not because Marines are more expensive; it’s just my portion of the budget is smaller. That’s going to go well over 70 percent by the end of [the next five years] if something is not done.”

Retirees and service members are starting to weigh in. Bryan McGrath, a retiree, published an article that calls on us to first recognize that there is a problem and then offers solutions that do not break faith with those who have served but must be willing to renegotiate with those yet to serve.

This country was attacked in 2001, and the U.S. military has been at war ever since. Popularity of the military remains high. This popularity has become a burden as Congress is reluctant to approve any military compensation reform that might be perceived as a reduction.

This reluctance remains even for proposed reforms that would only affect future service members. Congress appears content to allow the U.S. military to be the best compensated force on the planet to the detriment of training, operations, maintenance and investing for the future, leveraging the technological advantage associated with American ingenuity.

A version of this post originally appeared in the San Diego Union-Tribune.

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For 2014, the raise was 0.8% less than the ECI Title 37 dictated. That, combined with the recently announced retiree COLA adjustments, I am sure they freed up a ton of dollars to spend on other stuff.

BuckeyePhil

The pay cuts need to start at the top. Look at the recent revelations in regards to flag retirement compensation.

Jim Murphy

I’ve grown tired of all the percentages that are thrown about, and I’m not sure they add up. This article included an example: “‘About 50 percent of every Defense Department dollar goes to personnel predominantly as compensation,’ Adm. Jonathan W. Greenert, chief of naval operations, testified.“

Looking at the DoD budget on the Defense Comptroller website, which lists documents dated May 2013, this quote doesn’t appear accurate. From what I could decipher from these documents (they’re fun to read, really), DoD expenses are:

$146.9B for Military Compensation
$247.3B for Operations and Maintenance
$75.4B for Revolving Management Funds
$105.7B for Procurement
$8B total Research, Develop, Test, and Evaluation
$11B for Construction Programs

That’s a grand total of $594.3 billion, with Military Compensation accounting for 24.7%. That’s less than one quarter of the budget, not half like Greenert claims. Certainly there are personnel costs in O&M and Construction budget items, but not enough to account for another quarter of the total budget.

What am I missing?

NavySubNuke

The personnel costs in O&M are huge – all DoD civilian personnel are paid from that. There is something like 700,000 civilians in DoD including only God knows how many top level GS-15s and SES’s. I think if you pulled out those costs you would easily reach at least 45% if not the full 50%. Also, I’m not sure how costing for things like base housing falls out – I believe part of that is O&M and part of it is construction.

Jim Murphy

But you can’t just selectively “pull out” certain costs to make the percentages fit the rhetoric. While Greenert’s statement was generic about 50% going to “compensation,” the discussion is specifically about military compensation and not related at all to the civilian workforce (whose pay and benefits are not controlled by DoD). Even if we did calculate the numbers as you suggested, approximately 680K civilians in the workforce would not account another 25% of the budget, an amount equal to the approximately 1.4 million active duty and 800K reserve service members.

Looking at Greenert’s statement again, he said “About 50 percent of every Defense Department dollar goes to personnel predominantly as compensation.” So half of the total budget goes “predominantly” to compensation. That’s nearly true if one assumes 51% of 50% (the predominant portion of half the budget – meaning about 25% of the total budget) goes to compensation. In that case, it’s a relatively accurate statement intentionally phrased to lead you to an incorrect conclusion.

NavySubNuke

we probably just have a difference of opinion but if you tell me the cost is predominantly personnel than in my mind that includes active duty, reserves, and civilians since all are considered personnel. I would draw the line at including contractors though.
Also – I’m asking because I honestly don’t know the answer – where does retiree pay and Tricare funding come from? Is that included in any of the pots of money you listed above? I know VA funding is separate but does retiree pay and benefits come from DoD’s budget?

Jim Murphy

It’s not a matter of opinion…it’s math. Retiree pay does come from the DoD budget and is included in the first figure above which I incorrectly labeled Military Compensation. That $146.9B should be labeled Military Personnel Programs which includes all military personnel costs (from ROTC programs to Social Security tax to retiree pay), a lot more than just compensation. That means compensation is even lower than the 24.7% I listed originally. The grand total is on the last line of last page in this section.

I’m not sure where Tricare costs are listed…I haven’t found them yet. You can view the entire budget – or at least the May 2013 version of the FY14 budget at this link (spelled out because disqus doesn’t like URLs): comptroller dot defense dot gov slash budget dot html,

NavySubNuke

Whether or not DoD civilians count as DoD personnel is not a matter of math – it is a matter of opinion. I think they do, you think they don’t.

Jim Murphy

I thought you meant we had a difference of opinion regarding the percentage which, whether or not you count civilian pay and benefits, would change. But it still wouldn’t change enough to make Greenert’s statement true.
Regardless, the figures I listed above only include military personnel costs – which I believe in all instances/discussions on the topic only include those in uniform, even if your definition differs – do not account for half the DoD budget.

jsmithcsa

Thanks for standing up to the myths and lies about military compensation.

JohnQTaxPayer66

Federal and Defense Civilian across all agencies need to be reviewed or more to the point they need to be cut in pay, benefits and headcount. Compare those pay packages to the military and then come back and write a real article.

Cyprian

How about you write an article about REFORMING all of the social welfare entitlements, and taking away food stamps, un-ending unemployment benefits, paying for tuition and healthcare for illegal immigrants, and lowering the salaries of Congress before you write such an article. How dumb are you to suggest taking away hard earned benefits from .05% of the population that volunteer to actually serve their nation. So tired of seeing crap articles and opinions like this. Come spend some time in Afghanistan away from your loved ones.

jsmithcsa

Yep, we have money for Cash for Clunkers and mortgage bailouts for people who do more for this country than exhale, but military compensation breaks the budget? Something wrong with this picture.

Kentucky Raven

Cyprian…great points. What “entitles” someone to get free healthcare, welfare, food stamps, unemployment benefits? Servicemembers have earned their entitlements and benefits so the “entitled” can remain non-contributory to the rest of society. Time to change the culture in America and place a value on earning your keep, as opposed to expecting it from the government.

disaptvet

How else can politicians stay in power if they don’t buy votes with free handouts?

Pat Patterson

Yep, you hear about not enough money to support social security and Medicare but you never hear about not enough money for food stamps and welfare.

FosterPops

and who is figuring in the cost of over priced contractors, mainly the ones working is SWA making 150K per year counting canteens. Or we could talk about all the civilians that took over on post military jobs i.e. MP’s and Cooks just to name a couple.

jsmithcsa

Those guys — are there are not many — are being cut hand over fist. Three of them used to work for me. Retired servicemembers, every one. One just lost his house. One more is selling his because he can’t make payments. I’ve lost contact with the third. Does that make you feel better?

The contractors didn’t “take over” the mess halls. The military was cut and someone had to do the job. Thank those in government for their repeated “reduce the size of government” campaigns, but can find no place to cut besides the military.

disaptvet

Those sucking down welfare checks are a lot larger portion of the voting population than those who actually do something for their country. Easier to make symbolic cuts that don’t really affect anything (especially politicians getting re-elected) than to actually make a difference. Contractors did take over the mess halls; they didn’t do it maliciously and you are correct that someone had to step in and do it, but they did take them over.

FosterPops

Jsmithcsa – I am retired military, 26 plus years and all I am referring to is we need to look at a lot of different avenues of approach other than cutting our troops in boots. Think about how many thousands of contractors work in SWA or even on our stateside installations making the big bucks (seen it myself) and our troops at home are suffering. What are we gonna do when all of the troops come home? (not like that is gonna happen but, you’re getting my drift)

jqsoldier

CAPT, where is your critical thinking? This is a regurgitation of the Pentagon’s talking points. It adds nothing they haven’t told us. You don’t even challenge their assertions, numbers, or motivations. Sorry, I’m not buying their propaganda or yours. They committed to full COLA advertisement just as we committed to serve. I kept up my end of the bargain, now the Pentagon and Congress need to keep theirs.

Callawar

“Congress appears content to allow the U.S. military to be the best compensated force on the planet …”

Another fact free post. Several allied countries pay more to their service members than the US military does.

Dave

Sir, you need to check your facts. They are vastly inflated by the DoD to fit their commentary and to save the procurement budget. Do some checking and see where that mismanaged budget is going. Military personnel budgets have remained flat as a percentage of the defense budget since 2000 at about 28%.

disaptvet

I’m tired of hearing “military is paid more than civilians with equivalent education”. Last time I was in Afghanistan, my civilian equivalent was making over $300k a year. That’s almost 4x what I make INCLUDING the tax free benefit and hazard duty pay.
That might be applicable in a CONUS only, 9-5 job, but to get a civilian to go away from their family for a year+ at a time, and get shot at, and possibly not come back, you’d have to pay them a lot more than what we get. How about we do an apples to apples comparison. OH, take away those $300k salaries we are paying to contractors overseas and maybe the personnel costs come down.

NobodyInParticular

I think we are seeing a slow shift.

Back in the 60’s and 70’s it was popular to slam the military and it was mostly socially acceptable. “Lifers” were viewed as those that could not make it in the “real” world. Others were viewed as baby killers. With the Reagan revolution, his emphasis on finishing the Cold War and a resurgence in overall American confidence, the military became more popular. This popularity became ever more prevelant after 9/11.

Now that 9/11 is over a decade away and the economy is in rough shape, the enemies of the military are very slowly getting bolder. On the left, its enemies are coming back out of the wood work, pretty happy that they can now spout their hate of all things American. A resurgent libertarian right is lumping the military with all bloated government. The center is generally supportive but with fewer and fewer having served they are also increasingly detached. In a nutshell support is still strong but starting to wane.

Just because this article is written by a Captain, does not mean much to me. Reductions in military pay and benefits will affect a retired Captain much less (on a practical level) than a retired E6 or E7. Senior officers and to a lesser extent senior enlisted often have more to gain floating with societal trends then remaining loyal to the military.

One can argue back and forth about the specifics of the numbers, which are certainly not layed at with clarity. One number specifically not discussed is that defense spending overall, measured as a percentage of GDP, is at close to its lowest level since prior to WWII and is. Since much of the compensation of military members is a fixed cost, a low budget will result in fixed costs rising as a percentage. Just one more way to present your numbers.

Compensation is under pressure through out the economy but what I see here is simply testing the waters to see is society can simply rip off a relatively small portion of the voting block. I think we should ensure they cannot.

Pat Patterson

I think you are wrong about senior officers and going along with societal trends and not being loyal to the military. I’m a retired O-6 (and former enlisted) and certainly don’t have that attitude and neither do my current or former military officer friends.

NobodyInParticular

Not saying that you in particular are. Many are not. Some in the flag ranks are even getting fired for their loyalty right now IMO. Others are retiring in disgust and/or protest. Others are quietly just trying to work through everything despite pressure.

That is another conversation entirely, but, as a result, some are staying who are more interested in themselves than in the troops. And with many loyal people leaving, the disloyal have more room for advancement.

I know nothing of Capt. Brennan’s character. However I do know that any cuts in benefits will almost certainly result in less impact on his life than on a retired E6 or E7. In that light some of the suggestions from people like Capt. Brennan for cost cutting in the personnel arena sit about as well with me as Al Gore calling for reductions in carbon emissions while flying on his private jet.

richccf

What I’d like to see are all these “leaders” stepping up and taking cuts to their own pay/retirement. I don’t need some retired flag officer who makes $234,000/yr in retirement telling me that a COLA cut is a good thing. And I certainly don’t need to hear some overpaid desk jockey, that at minimum is getting paid $115k/yr, saying things need to change.

Michael Warsocki

When the Facts are placed in context, Capt. Brennan’s numbers don’t add
up.

To start with, health care represents about 16 percent of U.S. gross domestic product (GDP). According to DoD, health costs “represent about 10 percent of the non-war defense budget.”

When compared to the national rate, that is a 6% below the average of the business world. Which is a is pretty reasonable for a personnel-heavy business that’s inherently dangerous. Who knows what Obamacare will do to the percentages.

This argument has been going on for years now, yet just two years ago the Pentagon’s own July 2012 reprogramming request to Congress, acknowledged costs will be $708 million less than budgeted for FY2012.

“These funds are excess to Defense Health Program requirements,” the document
said, “and can be used for higher priority items with no impact to the
program.”

But how can that be given the Capt’s argument. Well…….
“The FY2012 budget estimate assumed private sector care cost growth of 12.9%
for active duty and 8.5% for all other beneficiaries,” the reprogramming document continued. “Through the first six months of FY2012 [costs actually] are growing at
historically low rates of 0.6% for active duty and -2.7% for all other beneficiaries.”

So all the time Defense leaders were complaining of exploding health costs, the
costs actually were…going down.

In response to this revelation, House Armed Services Committee leaders fired a
scathing, bipartisan letter to Defense Secretary Leon Panetta. “As you are aware,” the letter said, “The House of Representatives…declined to grant DoD the authority to raise TRICARE fees. We subsequently heard from DoD that our refusal…was endangering the sustainability of TRICARE programs. We have heard that ‘TRICARE is crippling’ the DoD. This does not appear to be the case if DoD has a $708 million surplus in FY2012…We do not understand how DoD can justify a request to raise fees on a class of people whose costs to the department are actually decreasing.”

And it’s not as if this was a one-time thing. According to the Government Accountability Office, the Defense Department underspent its TRICARE budget for civilian care by $771 million in fiscal year 2010 and by more than $1.3 billion in fiscal year 2011.

Capt Brennan do you want to bet your flight pay that 2012 and 2013 will be the same?

ThisGuy

Sir,
You’re close to retirment, huh?

Becky

Anyone have a source link for newer information. I am writing a paper for school and I am looking for credible sources on this topic. Any help would be appreciated.

kookaburra

This person made O6 in the Navy?

Mic Mac

Easy solution…no officer retirement pay.

Sandy

the armed forces IS people – the best sensor system is still the human. OF COURSE we should be paying people well and not cutting retirements….if you lose the people, you lose capability. If you want to cut something, cut back on these Littoral combat ships….little firepower/capability for the money…we don”t need 52 of them….it is totally unethical and immoral to renege on our people’s retirement.

Guest that checks facts.

Capt. are you obviously drank an extra large cup of that special Koolaid, or maybe we should call it Fool aid, for those special people like you. We could refer to it as Aid for Fools and take more money away from the people that really protect Americans.

James B.

The DoD hires people and buys things we don’t need, and then mismanages the people and things we already have, and that is the issue you totally miss.

This entire article is arguing over a few percentage adjustments, which are real money, but not real improvements. What would be helpful is an examination of where the DoD wastes money, and suggestions to fix structural issues.